BREAKING: Petrol soars above N1,000/ltr as Tinubu okays 15% import tariff

Nigerians may soon pay over N1,000 per litre for petrol following President Bola Tinubu’s approval of a new 15% import duty on refined petroleum products. The controversial policy has sparked immediate concerns about rising living costs among citizens and industry stakeholders.

The presidential directive introduces a 15% ad valorem tariff on imported petrol and diesel. This significant policy shift aims to protect local refineries from cheaper imported alternatives while stabilizing Nigeria’s downstream petroleum sector.

President Tinubu’s approval came through an official letter dated October 21st. The communication was addressed to the Attorney-General of the Federation, the Federal Inland Revenue Service, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The letter outlined immediate implementation of what government officials describe as a “market-responsive import tariff framework.” This measure follows a formal proposal from FIRS Chairman Zacch Adedeji seeking to align import costs with domestic market realities.

Petroleum marketers have reacted with strong concern to the new tariff. Multiple depot operators speaking anonymously warned that the additional duty could push pump prices beyond the N1,000 mark, creating further hardship for ordinary Nigerians.

As detailed in the complete version, there are several key factors to consider.

The National Vice-President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, acknowledged the policy’s dual nature. He noted that while it might discourage imports and promote local refining, it could also lead to perceived monopolization in the sector.

Fashola emphasized the critical need for local refiners to meet domestic demand consistently. He stressed that any failure in local supply could trigger fuel scarcity since importers might be discouraged by the higher costs.

The IPMAN leader expressed confidence that the government acted within legal boundaries. He referenced the Petroleum Industry Act as providing sufficient framework for such policy interventions in the petroleum sector.

Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, described the situation as potentially win-win. However, he emphasized the need for continuous monitoring to ensure both product availability and affordability for consumers.

The government’s own projections indicate the tariff could increase landing costs by approximately N99.72 per litre. Despite this, officials estimate that Lagos pump prices would remain around N964.72 per litre, below regional averages in neighboring West African nations.

The policy comes with a 30-day transition period to allow importers to adjust their operations. Implementation will be jointly managed by the Nigeria Customs Service and the NMDPRA, with all payments directed to designated government revenue accounts.

Energy analysts have expressed mixed reactions to the new tariff framework. Some welcome it as necessary protection for domestic refining investments, while others caution about potential short-term supply disruptions and price volatility.

The timing of this policy is particularly sensitive given Nigeria’s current economic challenges. Many households and businesses are already grappling with high inflation and reduced purchasing power across various sectors.

As the 30-day transition period progresses, all stakeholders will be watching closely to see how the new tariff affects market dynamics. The government has committed to periodic reviews of the policy to assess its impact and necessity as domestic refining capacity expands.

The coming weeks will be crucial in determining whether this protectionist measure achieves its intended goals or places additional burden on Nigerian consumers already facing multiple economic pressures.